T-Mobile to FCC: Redo airwave auction rules

T-Mobile is warning the Federal Communications Commission that its rules for next year’s highly anticipated airwave auction could boost AT&T and Verizon and hurt smaller carriers.

In a company blog post on Wednesday, T-Mobile Vice President of Federal Regulatory Affairs Kathleen Ham warned that the telecom giants need “reasonable” limits in the 2015 auction and pushed the agency to reconsider the rules.

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“Without a reasonable limit on the two dominant carriers’ market power, the two dominant carriers would likely push competitors out of the auction and consumers would face an uncertain future of less innovative, more costly, and lower quality wireless broadband services,” she wrote.

The FCC approved rules earlier this year for the auction, which will involve buying back airwaves from broadcasters and reselling them to wireless companies looking to boost their cellphone networks.

The rules currently in place give too much bidding power to the deep-pocketed AT&T and Verizon, according to Ham.

“Competitive carriers that have little or no low-band spectrum need more access to these resources, while the dominant carriers that control nearly three-quarters of all low-band spectrum in the market need less,” she wrote.

The rules approved in May would keep larger companies like AT&T and Verizon from bidding for certain amounts of airwaves in each geographic market once that market’s auction reaches a certain revenue threshold. But the rules left fewer airwaves for small companies than FCC Chairman Tom Wheeler’s original plan.

Under Wheeler’s original plan, if broadcasters were willing to sell 60 megahertz of airwaves, AT&T and Verizon would have been limited to bidding for 30 MHz — auctioned off as three 10 MHz blocks.

The industry giants protested. AT&T threatened to sit out of the auction if they could not bid on more airwaves, sparking concerns that the auction would fall short of the revenue it needs to fund a nationwide communications network for first responders.

The auction rules passed by the FCC in May ensure that the big wireless companies can bid on at least 40 MHz in each market, which would allow the companies to evenly split the four 10 MHz blocks, regardless of how much spectrum broadcasters sell back.

T-Mobile expressed reserved optimism after the May FCC vote.

“While we would have preferred the FCC to reserve more spectrum for competitive carriers, we are hopeful the auction rules will enhance competition and benefit consumers,” Ham said in a statement.

Now the company is asking the FCC to reconsider how much spectrum is available for smaller companies and the trigger that determines whether the limits on AT&T and Verizon go into effect.

Ham called the company’s concerns “limited and narrowly tailored.”

“We want the FCC to do more of the right thing by making the spectrum reserve and its trigger meaningful enough to make sure the intended result of a more competitive wireless broadband market is achieved,” she wrote.

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